First things first, when you hear cyber-anything your immediate thoughts may jump to computers. That’s reasonable, since the words “cyber” and “online” and “computers” tend to be used interchangeably. However, the exposure you have and the losses you may suffer extend far beyond your computer screen. It isn’t about simply not clicking on links from people you don’t know (you do know not to do that, right?) and the rest will be OK.

Here is a list of potential cyberexposure issues you could encounter that cyber insurance could help you deal with:

Cyberextortion. One day you try to turn on your computer only to find a message stating that you must pay a fee, either in cash or some form of cryptocurrency in order to get into your own computer. Yes, it happens, what expenses would you incur to get your computer back? Think about all that is on your machine — work documents, banking and tax information and personal photos. What wouldn’t you pay? A cyber insurance policy may cough up the bucks on your behalf to get your stuff back.

Network liability. While you’re lounging in your chaise lounge, a sudden pounding on the door startles you. It’s the FBI with a search warrant for your house. Seriously? Yes, seriously. Turns out a hacker gained access to a computer on your home network — maybe your laptop or a desktop computer, maybe even a phone that connects to your Wi-Fi — and was sending out messages threatening people and trying to extort money from them. Naturally, you haven’t a clue about any of this, but this is going to take time to explain and money to deal with.

Identity theft. Remember the name of that odd rectangular object that is mounted near the end of your driveway? I’ll help you — it’s your mailbox. Visiting your mailbox, you open it up to find a statement for a credit card that you don’t recognize. What’s more, it’s a pretty darn active credit card with charges for items that, again, you don’t recognize. Your personal identity has been stolen, and some lowly character parading around as you is opening up credit cards and going on shopping sprees. And that’s just the tip of the iceberg. Later, you find out they have applied for multiple credit cards and even a home equity line of credit. This can be one of the most costly events you can imagine. You will likely need an attorney who specializes in identity theft, because you will now need to actually prove to every bank or creditor that you did not make these charges or open these accounts.

Phishing attacks. Having nothing to do with putting a worm on a line and casting it out to poke some holes in fish, a phishing attack is when someone attempts to convince you they are a legitimate person or business in need of your personal information. What they do with this information can range from opening accounts to promoting illicit drugs, or worse. You may not be aware this has occurred or has been ongoing for months or longer. Just try to explain that away at the next PTA meeting.

Reputation management. Like it or not, you have an online reputation, even if you’re not a heavy user of social media. Type in your name at Google.com, and you may or may not be surprised. However, you will find results that purport to be about you. If a bad actor is out there spreading lies, attacking others or just generally being a jerk, it’s a pretty complex process to get those false narratives offline. If you are at all in the public spotlight, or work for a company that is, your reputation is everything.

It's expensive to put things right

As you can see, you have cyberexposure, whether you like it or not, whether you realize it or not. Sometimes through zero fault of yours, you may end up in a position where you have to endure the time and expense to put things right. You can do it yourself, perhaps, and foot the bill, but do you really want to?

Cyber insurance policies tend to be inexpensive, and there are many insurers offering them. Remember to read your policy carefully, since there is no standard package that exists; comparing the coverage from company to company is challenging. Talk to a broker, talk to the insurance company, find out what they offer and compare it with what you want or, more accurately, what you need.

Cyberexposure is here to stay. Your options are simply to weather the storm on your own or buy a heavy-duty raincoat and umbrella.

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The retail giant also highlighted its commitment to creating an easy and convenient checkout experience for customers, with credit and debit cards, “buy now, pay later” services and the Target Circle membership program, which applies deals automatically at checkout.

Target, which has almost 2000 stores across the U.S., follows in the footsteps of Aldi and Whole Foods Market in officially ditching checks. And although they’re still accepted by retailers including Walmart, Macy’s and Kohl’s, it’s now increasingly unlikely you’ll see anyone pulling out their checkbook in store.

Who’s still writing personal checks?

According to data from YouGov Profiles, only 9% of Americans said they still use checks when making a purchase in-store. Cash is the most commonly used form of payment, with 67% of those surveyed saying they prefer handing over bills and coins. 

Debit cards (42% using chip and 35% swipe) and credit cards (35% using chip and 26% swipe) are the next most popular methods, while contactless payments are closing in, with 17% usage.

However, a February 2024 survey from GOBankingRates found that while writing checks may be less popular than it used to be, 54% of Americans still wrote a check in the past year. According to the data, 15% of Americans wrote a few checks a month, 17% wrote less than six checks, 17% wrote a check once a month and 4% wrote more than 12 checks.

Unsurprisingly, the survey results highlighted the link between age and use of checks. Many Americans in the 55 and over age group said they still write a few checks a month — with 15% in the 55 to 64 age group and 22% in the 65+ age group reporting this.

In contrast, 46% of those ages 18 to 24 hadn’t written a check in the past year, along with 51% of those aged 25 to 34, 51% of those aged 35 to 44 and 50% of those 45 to 54.

Making the case for personal checks

According to Fifth Third Bank, “certain payments are likely to be better suited to checks over digital payment alternatives, especially for people with spotty internet access.” 

The bank’s website states: “The most common transactions involving checks are for rent, utilities, taxes and other payments to the government, payments to contractors, gifts to charities, payments for healthcare, and education expenses such as tuition payments.”

“Many people also still use checks instead of cash to give monetary gifts,” it adds. “It’s a more secure form of payment, especially if mailing a card.”

That’s reassuring for kids. While grandparents may no longer be able to use their checkbooks in their local grocery store, at the very least, they’re still handy for sending birthday money in the mail.

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Prices fell in June for the first time in almost two years. Headline CPI declined 0.1% month-over-month, for the first drop in 23 months, according to the U.S. Bureau of Labor Statistics. Economists forecast inflation to increase by 0.1% vs May. On an annual basis, CPI rose 3.0% in June – down from 3.4% the prior month – to beat estimates for a 3.1% gain. 

Core CPI, which excludes food and energy costs, likewise surprised to the downside, rising just 0.1% in June vs the previous month. Forecasts called for a 0.2% increase.

Fed Chair Jerome Powell and the Federal Open Market Committee (FOMC) are looking for sustained evidence that inflation is decisively headed toward its long-term target of 2% before they move to cut the federal funds rate from a 23-year high. The latest CPI report adds a dovish data point to the Fed's deliberations on interest rates, experts say.

"Better than expected inflation readings in many key sectors should allow the Fed to start talking about adjusting policy in July and potentially allow the Fed to act in September," says George Mateyo, chief investment officer at Key Wealth. "In particular, housing, which has been elevated, showed some moderation. That said, we still see the Fed wanting to gain further confidence before cutting aggressively unless stress materializes in the labor market." 

As of July 11, futures traders assigned an 86% probability to the first quarter-point cut coming in September, up from 70% a day ago, according to CME Group's FedWatch Tool. 

With the June CPI report now a matter of record, we turned to economists, strategists and other experts for their thoughts on what the data means for markets, macroeconomics and monetary policy going forward. Please see a selection of their commentary, sometimes edited for brevity or clarity, below.

Expert takes on the CPI report

"The CPI report showed that prices for the consumer are slowing. The headline CPI month over month reported that prices actually fell for the first time in 23 months to -0.1%. This was lower than the forecasted 0.1%. This will be welcome news for the Fed although Chairman Powell did indicate in his remarks to Congress on Tuesday that there are risks to both sides of the economy. On the one hand we have the threat of inflation, which up to now has been the main point of focus for banks around the world including the Fed. On the other hand, with interest rates now on the restrictive side the Fed has to be careful not to stave off growth and push the economy into a recession." – Pete Tibbles, senior vice president, foreign exchange, financial risk management at BOK Financial

"The inflation print today appears to prove the hot data to start the year was mostly an outlier. It appears we've resumed the disinflationary trend lower – great news for the Fed. As economic data continues to slow, the implications are passing through to cost measures (and to the labor market where the unemployment rate is drifting higher). We imagine the Fed speak will turn more dovish, and the more promising data all but guarantees a September cut. We honestly wouldn't be surprised if the Fed went ahead with a quarter-point cut in July." – John Luke Tyner, portfolio manager at Aptus Capital Advisors

"Widespread disinflation; the Fed will cut soon. June's CPI data bring more evidence of broad-based disinflation, giving the Fed the green light to ease multiple times this year. Prices for core services ex-rents were unchanged for the second straight month. Looking ahead, the foundations remain in place for CPI inflation to drop further in the second half of this year. Labor market slack is building, dragging on wage growth and new rent increases, while retailers' margins are under mounting pressure from increasingly budget-conscious consumers. The CPI data will not stand in the way of the FOMC cutting interest rates quickly later this year in response to a faltering labor market. We continue to expect 1.25 percentage points of easing this year, beginning in September with a quarter-point cut. The sooner the better." – Ian Shepherdson, chairman and chief economist at Pantheon Macroeconomics

"Jerome Powell did his best Kobe Bryant impression this week, proclaiming the 'job's not finished' on inflation. But this CPI print below expectations will make the calls of the September doves pretty impossible to ignore. With the labor market no longer considered a source of inflationary pressure, markets will likely turn to employment data, where any softening will likely crank the volume up on September noise. Wake me up when it ends." – Dann Ryan, managing partner at Sincerus Advisory

"This report supports that we're getting close to the onset of Fed rate cuts. The risk narrative has become better balanced between inflation and a growth slowdown, and the June data showed a normalizing labor market and cooling price pressures. The soft landing remains in sight. For investors who are still feeling cozy holding onto excess cash, this should prompt consideration of whether that still makes sense. The case for extending duration is strengthening, and we see potential for stocks to continue making new record highs in the year ahead. Now, the focus shifts to earnings season to validate that optimism." – Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management

"Part of the reason for this decline in inflation was that household consumption, construction spending and the services sector inflation came in below analysts' expectations. Another area to note is rents – the cost of rent rose just 0.3% in June. This is the smallest increase in almost three years. As per Jerome Powell’s last Fed minutes, he needed to see more encouraging economic data before rate cuts are enacted. In a reversal of prior comments, he recognized that the economy is slowing, and he appears to be setting up for a September rate cut. Although it appears a September rate cut is more likely, we still have two more inflation prints prior to the September Fed meeting – anything can happen, and the Fed is closely monitoring the situation." – Robert Conzo, CEO and managing director at The Wealth Alliance

"Today's CPI report is a good scenario for the Fed and could help change Fed Chair Powell's perspective. Remember that just yesterday Powell testified he believes inflation is receding, but he was reluctant to say it’s moving substantially down toward the Fed’s 2% goal, but this CPI could change all that. The 3.3% core reading was the smallest since April 2021, and the so-called super core inflation – core services less shelter – was the lowest level in nearly three years. The June CPI report should give the committee confidence that the disinflation narrative is tracking and that rate cuts should begin in September." – Ivan Gruhl, co-chief investment officer at Avantax

"Today's data provide a welcome indication to the Fed that inflation is indeed coming down after several hot monthly numbers at the start of the year. Despite today's favorable CPI report, a rate cut at the Fed's meeting on July 31 remains unlikely. In the absence of a meaningful uptick in inflation in July or August, we would anticipate a rate cut at the September meeting. Overall, we see an economy that is weakening but not in imminent risk of recession. Today's report should be supportive of both equities and bonds." – David Royal, chief financial and investment officer at Thrivent

"June headline prices fell for the first time in over two years due to declines in energy and vehicles prices and substantial cooling in shelter price increase. This is great news when combined with last week's report on labor market moderation to consider more relaxation on monetary policy than anticipated. The federal funds rate dot plot from the June summary of Projections indicates that the Federal Open Market Committee (FOMC) members are split on one or two rate cuts this year. If the trend in inflation in the previous two months continues, the likelihood of having two rate cuts this year increases." – Dawit Kebede, senior economist at America's Credit Unions

"This morning's inflation report was much better than expected, showing a decline in headline inflation driven by lower energy costs. Core inflation also posted its smallest monthly gain since August 2021, helped by a slowdown in shelter growth and lower auto prices. While CPI readings remain high relative to the Fed's 2% target, they have come down sharply and are moving in the right direction. Overall, it's a very positive report for the Fed, which increases the likelihood of rate cuts in the second half of the year, with the September FOMC meeting firmly in play." – Mike Cornacchioli, senior vice president for investment strategy at Citizens Private Wealth 

"Powell has been very careful to leave the Fed's options open when it comes to rate decisions. He refuses to give any indication whether there could be future cuts or even hikes but has been clear that he wants to see more good data to strengthen the Fed's confidence that inflation is making its way to 2% before deciding to cut rates. I feel the print this morning would be considered good data even by Powell's standards. In addition to the data this morning we've been some cooling in the labor market, the tightness of which has been another hurdle that Powell has mentioned in the past, so when taken together the odds of future rate cuts become more realistic. The Fed doesn't rely just on the CPI report but should be indicative of a larger disinflation narrative when Core PCE, the Fed's preferred gauge, comes out on July 26. There are still two more inflation and jobs reports before the next meeting in September but should the disinflation progress stay on its current path there is a real possibility for multiple cuts in the latter part of the year rather than the one that was previously being priced in." – Clayton Allison, portfolio manager at Prime Capital Investment Advisors

"Investors have waited for a long time for shelter to soften and they got it in June. Given rising inventories in housing, this sizable component of the price index is finally starting to give the Fed what it needs to see for rate cuts. Goldilocks is here and a September cut looks more likely than ever." – David Russell, global head of market strategy at TradeStation

"Combined with the weaker than expected June jobs report, today's inflation reading builds a stronger case for a Fed rate cut in the coming months. It remains unlikely that the Fed will move at its meeting later this month, but if the dual trends of a weakening labor market and lower inflation continue, it will likely put the first rate cut in years firmly on the table for the FOMC's September gathering." – Eric Merlis, managing director and co-head of global markets at Citizens

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The change is effective September 1 and will impact around 52 million memberships, Costco said in a statement. Costco has traditionally raised its membership prices by $5 to $10 every five-and-a-half years, so the latest increase should not come as a shock to members since the last increase was in June 2017.

Additionally, management has been clear about its plans to raise membership fees. On its conference calls in December 2023 and March of this year, Costco’s chief financial officer said the fee increase was a matter of “when, not if.”

The new Costco fee for non-executive memberships in the U.S. and Canada will be $65, up from $60. Executive membership fees will be $130, up from $120, which consists of the $65 primary membership fee plus the $65 Executive upgrade. 

In addition, the maximum annual 2% reward associated with Executive memberships will increase to $1,250 from $1,000.

For comparison of Costco vs Sam's Club, Sam's Club membership is $50. But if you know the secrets to shopping at Costco, you can find ways to make up that $15 annual difference. 

Costco stock reacts to the announcement

Costco (COST) stock is down by more than 3% following the membership price increase, but analysts are bullish on the stock going forward. According to S&P Global Market Intelligence, the consensus recommendation among analysts it tracks is a Buy.

However, analysts’ price targets have struggled to keep up with COST’s run higher. Indeed, shares are up more than 31% in 2024 and over 61% in the last year. Currently, the average price target is $874.41, representing implied upside of just about 2% to current levels.

Financial service firm Oppenheimer is one of the most bullish outfits on COST stock with a Buy rating and an upwardly-revised price target of $950.

“COST's performance continues to stand out in a difficult retail backdrop, and we expect share gains to continue,” Oppenheimer analyst Rupesh Parikh said in a July 10 note. “In addition, management finally announced a membership fee increase that has been anticipated for some time. We are lifting our estimates to reflect the increase.”

Oppenheimer’s $950 price target implies upside of about 11% to current levels.

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Rent a pool with Swimply

Swimply, founded in 2018, is an online marketplace for pool rentals and is available across many large U.S. cities, as well as in Canada and Australia. Similar to Airbnb, you’ll enter your location and desired date, and then browse available listings in that area for the specified time frame. Added filters also let you narrow down your options based on size, amenities and price range. Once you find a property you like and the booking is approved by the owner, you’ll receive the property's address and any additional information concerning your reservation. Unlike Airbnb, however, rentals aren’t made on a daily basis, but on an hourly basis.

Swimply is a good option if you’re looking to cool off with a solo swim or host a pool party with friends and family — without having to shell out for a nightly hotel rate (for a pool you'll have to share with other guests, anyway). Another benefit: you can even search for pet-friendly pool rentals, so your dogs can cool off by taking a swim as well. Listings range from simple, basic pools, to properties with BBQ grills, hot tubs, waterfalls and kiddie pools. And while the main draw of the site is, obviously, its pools, you can also browse tennis courts and pickleball courts if that’s more your vibe. Just be aware that prices will vary depending on the listing.

How much does Swimply cost?

Since hosts set their own hourly rates, the cost of pools on Swimply varies from listing to listing. Prices can range anywhere from just $20 an hour, to several hundred dollars an hour, depending on location and amenities. However, a quick search in the Atlanta area shows many highly rated listings around $30 to $60 an hour. 

Available listings

Here are a few pictures and profiles of currently available listings in various locations to give you an idea of what properties are out there and how much they cost.

Resort Style pool and event space

• Location: Las Vegas, Nevada
• Price: $35 per hour

Club Oasis

• Location: Rochelle Park, New Jersey
• Price: $58.50 per hour

30 foot waterslide pool

• Location: Huntington, New York
• Price: $90 per hour

Mad Men pool

• Location: Portland, Oregon
• Price: $80 per hour

Private Bal Harbour waterfront pool/hot tub

• Location: Bal Harbour, Florida
• Price: $150 per hour

Make money by renting out your pool

Maybe you have a private pool, but you don’t use it as much as you should. You could make money on that. And no, you don’t have to rent out your entire home, either. You can rent out your personal pool by the hour on Swimply, all you have to do is create an account, list your space, set an hourly rate and establish your house rules. Approve guests at your discretion and get paid within 24 hours after a completed reservation.

Hosts earn between 70% - 85% of the total booking price (excluding guest fees) from each reservation. And the Swimply Protection Guarantee protects all bookings done via Swimply for up to $2 million for general liability claims and $10,000 of property protection per occurrence.

Not only is listing your pool on Swimply an easy way to help cover your standard pool maintenance costs, but it can also become a new revenue stream for you and your family. Some hosts make over $10,000 a month by simply sharing their pool with you when they aren't using it.

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Best credit card for Amazon Prime Day shopping

For those in the know, there are some great credit card options available to squeeze the most out of your Amazon Prime Day shopping.

US Bank Shopper Cash Rewards Visa (The "Secret" 6% Back Strategy)

Your first option is the US Bank Shopper Cash Rewards® Visa Signature® card. Why is it a "secret" strategy? Most credit card reviewers don't write about this card because it's not issued by one of the major banks, but it's still a deal. The card offers 6% cash back on the first $1,500 of combined quarterly spending at two big box retailers of your choice each quarter, including Amazon. Other retailers you can choose from include Home Depot, Kohl’s, Lowe’s, Target, Walmart and others. You’ll also earn 3% back (on up to $1,500 in quarterly spending) in a category of your choice — wholesale clubs, gas and EV charging stations, and bills and utilities — and a solid 1.5% on all other spending (most credit cards only offer 1% outside of their maximum-rebate categories).

One benefit of this card is its flexibility. For Prime Day, you can choose to earn 6% cash back at Amazon but then can change retailers afterward depending on where you typically spend the most. Plus, you can earn a $300 bonus after you spend $2,000 in eligible purchases within the first 120 days of account opening. And the $95 annual fee is waived in the first year.

Amazon Prime Visa (The 5% Back Strategy)

Option two is, of course, the Amazon Prime Visa credit card, which just raised its instant bonus offer for new cardholders to $200. The card earns an unlimited 5% back at Amazon.com and affiliated stores. It also earns 5% back on Chase Travel purchases, 2% back at gas stations, restaurants, and on local transit and commuting, as well as 1% back on all other purchases. 

You’ll need to be a Prime member, however, to earn cash-back rewards. An Amazon Prime membership costs $14.99 per month or $139 per year. However, Amazon does offer a 30-day free trial if you’re still considering whether an Amazon Prime membership is worth it. 

You’ll also earn the card’s welcome bonus immediately, with no required spending. Upon approval of your credit card application, you’ll instantly receive a $200 Amazon Gift Card loaded into your Amazon account. The card also has no annual credit card fee (apart from the cost of an Amazon Prime membership).  

The gift card hack

There's a credit card "hack" you can potentially try to maximize your earnings when shopping at Amazon. With the Blue Cash Preferred® Card from American Express, you'll earn 6% cash back (on up to $6,000 per year in purchases) at U.S. supermarkets. That means you can potentially earn up to 6% cash back on your Amazon.com purchases, but it’ll take a little more effort. Some shoppers will buy Amazon gift cards at the supermarket, with a 6% cash back rate, and then upload that balance to their account. The card also waives the $95 annual fee for the first year and rewards cardholders with $250 back after they spend $3,000 in purchases in the first 6 months. Keep in mind, however, that Amex frowns upon buying gift cards to meet your minimum spend requirement.

• Intro bonus: Earn a $250 statement credit after you spend $3,000 in eligible purchases on your new Card within the first six months. 
• Rewards rates: 
  • 6% back on up to $6,000 in annual U.S. supermarket spending, then 1%.
  • 6% on select U.S. streaming services.
  • 3% back at U.S. gas stations and on transit.
  • 1% back on other spending.
• Redemption: Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit.
• Interest rate: Low Intro APR:  0% on purchases and balance transfers for 12 months from the date of account opening. After that, your APR will be a variable APR of 19.24% - 29.99%. See Rates and Fees.
• Annual fee: $95, $0 introductory annual fee. See Rates and Fees.
• Terms Apply.

Can you pay for Amazon purchases with points?

We'd recommend not using credit card points to pay directly for Amazon purchases. While it may be convenient, you'll usually end up getting a lower value than if you redeemed those points elsewhere. However, according to The Points Guy, "The exception to this rule is the Prime Visa, because you’ll get the same redemption value whether you cash the points out through Amazon or for a statement credit."

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Drawing from these experiences, this article explores the five biggest reasons companies go bankrupt and provides insights into the lessons learned from these case studies.

1. Poor financial management

Poor financial management is one of the most prevalent reasons companies go bankrupt. This includes inadequate cash flow management, excessive debt and lack of financial planning.

Inadequate cash flow management. Cash flow is essential for day-to-day operations. Companies that fail to manage their cash flow effectively can quickly find themselves in financial trouble. For instance, one of our clients faced significant cash flow issues due to seasonal fluctuations in revenue. Without a robust cash flow management strategy, they struggled to cover their operational expenses during off-peak seasons.

Excessive debt. High levels of debt can be a burden, particularly if the company’s revenue projections fall short. This was a critical issue for another client of ours, which had accumulated substantial debt from its ambitious expansion plans. The debt burden became unsustainable when the expected increase in occupancy and revenue did not materialize.

Lack of financial planning. Without a comprehensive financial plan, businesses may fail to allocate resources efficiently, invest in growth opportunities and respond to market changes. Both the clients I mentioned above lacked detailed financial planning, which contributed to their financial instability.

2. Market changes and competition

Market dynamics are constantly evolving, and companies that fail to adapt can find themselves at a disadvantage. Increased competition, changing consumer preferences and disruptive technologies can all contribute to a company’s downfall.

Increased competition. New entrants or aggressive strategies from existing competitors can erode market share and profitability. One resort client faced intense competition from newer, more modern resorts in the area. Their inability to differentiate themselves and offer competitive amenities led to a decline in occupancy rates.

Changing consumer preferences. Consumer tastes and preferences can shift rapidly, impacting demand for products or services. For example, a hotel client struggled to attract younger travelers who preferred boutique hotels and vacation rental accommodations over traditional hotel stays. The client's failure to adapt to these changing preferences resulted in declining revenues.

3. Ineffective leadership and management

Leadership is crucial in steering a company through challenges and toward growth. Ineffective leadership can lead to poor decision-making, low employee morale and strategic missteps.

Poor decision-making. Leaders who lack the necessary experience or skills may make decisions that adversely impact the company. One client made several poor strategic decisions, including overexpansion without adequate market research and financial backing. These decisions stretched their resources thin and contributed to their financial troubles.

Low employee morale. A demotivated workforce can lead to decreased productivity, higher turnover and a negative company culture. For one client, low employee morale was a significant issue due to a lack of clear direction and support from management. This impacted the quality of service and guest satisfaction, further exacerbating their financial problems.

Strategic missteps, Strategic planning is essential for long-term success. Companies that lack a clear strategy or fail to execute their strategy effectively may struggle to achieve their goals. Several clients have lacked coherent strategies for growth and customer retention, leading to operational inefficiencies and financial strain.

Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives. Learn more >

4. Economic downturns

External economic factors can have a profound impact on businesses. Economic recessions, fluctuations in currency exchange rates and changes in interest rates can all contribute to financial distress.

Economic recessions. During economic downturns, consumer spending typically decreases, affecting revenue streams. Our resort client was particularly vulnerable to economic recessions, as discretionary spending on travel and leisure declined. This resulted in lower occupancy rates and revenue.

Fluctuations in currency exchange rates. For companies involved in international trade, currency exchange rate volatility can impact profitability. It can be a significant risk for many businesses with international operations.

Changes in interest rates. Rising interest rates can increase the cost of borrowing, affecting companies with high debt levels. One client faced increased interest payments on their substantial debt, which further strained their financial resources.

5. Legal issues and compliance failures

Legal challenges and compliance failures can drain resources and damage a company’s reputation. This includes lawsuits, regulatory fines and failure to adhere to industry standards.

Lawsuits. Litigation can be costly and time-consuming. Two clients faced legal challenges related to labor disputes and contract issues. These lawsuits diverted management’s attention and financial resources away from core operations.

Regulatory fines. Noncompliance with regulatory requirements can result in substantial fines and operational disruptions. While not a significant issue for the case studies discussed, regulatory compliance remains a critical concern for many businesses.

Failure to adhere to industry standards. Adhering to industry standards is crucial for maintaining customer trust and operational efficiency. Companies that cut corners or ignore these standards risk damaging their reputation and facing operational setbacks. Two of our clients struggled with maintaining industry standards, impacting their customer satisfaction and loyalty.

Conclusion

Understanding common reasons why companies go bankrupt can help businesses avoid these pitfalls and build a foundation for long-term success. Poor financial management, market changes and competition, ineffective leadership, economic downturns and legal issues are significant factors that can lead to bankruptcy. It is clear that proactive planning, effective leadership and strategic adaptability are essential for navigating these challenges. By addressing these critical areas, businesses can improve their resilience and increase their chances of success in a competitive market.

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And finding balance can be especially hard on women. According to a study from the Proceedings of the National Academy of Sciences, women are still more likely than men to take time out of the labor force or reduce the number of hours worked because of caretaking responsibilities. The “motherhood penalty" is a significant contributor to the persistent gender pay gap and the underrepresentation of women in leadership roles globally, according to the World Economic Forum.

The summer break is a great time to revisit your finances and make sure that you are making the most of every resource to help build and secure your family’s financial future (including your own). 

Workplace benefits are a sometimes-overlooked resource that can play a supportive role in helping you and your family work toward various financial goals. 

Here is a path toward maximizing your workplace benefits for the whole family:

Advance your long-term financial goals through workplace wellness benefits

Although setting long-term financial goals and creating a path to achieving them can be daunting, your workplace likely offers financial wellness benefits or a program to guide you down the right path. 

No matter how distant your long-term goals seem, it’s crucial to invest in your financial future at every stage of life. The longer you invest, the more you’ll potentially build in your nest egg by the time you retire. Further, this leaves time for your returns to compound. 

In fact, our research from Morgan Stanley Wealth Management shows that older investors would advise younger generations to start saving as early as possible (74%) and invest for the long term (54%). The key is to identify your goals and get started as soon as you can: Most people are primarily saving in the long term for retirement (78%) and an unexpected emergency (56%) — and many are doing so through their workplace benefits. 

As a first step, sit down as a family and assess what your long-term financial goals are and a timeline of when you’d like to achieve them. Are you setting aside money for college? What age would you ideally like to retire? Is your family complete, or do you anticipate having more kids? By setting clear goals and creating a realistic road map toward reaching them, you’ll be better equipped to make informed decisions about your finances. And look for opportunities to include your kids in the conversation — it's never too early to start building financial literacy and awareness. 

Next, review where your money is going and create a budget — this includes your income sources, debt payments, credit cards and bills. One way to do this is through online tools such as debt calculators, retirement calculators and budgeting apps, which can help you track your monthly income and expenses. If your employer offers a financial wellness program, you can utilize budgeting tools, savings support and even potentially access professional financial advice.

Consider using the 50-30-20 rule to help you budget: Put about 50% of your money toward necessities like food, housing and childcare, 30% toward leisure such as family activities, and then you have 20% left to put toward your long-term goals. For example, if you’re saving for your child’s college education, start contributing to a 529 plan. You can set up automatic contributions, and most states have no minimum or maximum limit. Your workplace may also offer savings programs or vehicles, such as savings accounts attached to 401(k)s.

Keep in mind that life is unpredictable — especially when you have a family. If you don’t have one already, consider setting aside even $10 a month to start building up an emergency savings fund. It’s a good practice to keep this in a separate, easily accessible account just for emergencies — such as a savings account, money market account or CD account. Ask your employer if they offer an emergency savings account match or any additional savings, budgeting or financial planning support. 

Align your workplace benefits with short- and long-term goals 

Look over your budget and goals and see where you can plug in your workplace benefits to better support your progress. For example, if your employer offers a retirement plan such as a 401(k), enroll. Look for wiggle room in your budget to increase your monthly savings contributions. Also, find out if your employer offers a 401(k) match and make sure you’re contributing the right percentage amount to receive the employer match. Our research shows that employees (64%) consider their 401(k) to be the most important benefit in meeting retirement goals.

Beyond direct contributions to retirement benefits, your workplace may offer additional benefits that can help you build investments — for example, equity compensation is growing in popularity, with three in four HR leaders (76%) reporting that their companies are offering some form of equity compensation — up 4 percentage points year-over-year and 11% since 2021, according to the Morgan Stanley at Work State of the Workplace IV report. 

Your employer may offer benefits related to family needs: If you’re saving for college or heading back to work, some workplaces offer student loan repayment and return-to-work programs. Also, if you’re caring for young children, or a part of “sandwich generation”— taking care of children and elderly parents at the same time – your employers may offer flexible work arrangements. Today, about one-quarter of adults are in the sandwich generation, with most also working part or full time, according to a Care for Business report. 

If you aren’t sure where to start, talk to your employer — they can help answer questions, provide information to help you take advantage of workplace benefits and direct you toward resources that can help you navigate your financial life. For example, our State of the Workplace IV report shows nearly 9 in 10 HR leaders offer financial wellness programs to help counterbalance work-life stressors.

For more nuanced questions, or for help building a more holistic approach toward your family financial goals, many companies also offer access to personalized financial guidance, such as self-guided financial education, a financial coach or financial advisor who can understand your family's unique situation and provide deeper support. At the end of the day, the health and happiness of your family is a top priority. Taking the time to invest in your family’s financial future today can bring peace of mind and allow you to focus on what matters to you most. 

This material has been prepared for informational and educational purposes only. As such, Morgan Stanley Smith Barney LLC (“Morgan Stanley”) is not acting as an investment advisor as defined under the Investment Advisers Act of 1940, as amended. 

This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley Smith Barney LLC (“Morgan Stanley”) recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a Morgan Stanley Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

When Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors (collectively, “Morgan Stanley”) provide “investment advice” regarding a retirement or welfare benefit plan account, an individual retirement account or a Coverdell education savings account (“Retirement Account”), Morgan Stanley is a “fiduciary” as those terms are defined under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the Internal Revenue Code of 1986 (the “Code”), as applicable. When Morgan Stanley provides investment education, takes orders on an unsolicited basis or otherwise does not provide “investment advice”, Morgan Stanley will not be considered a “fiduciary” under ERISA and/or the Code. For more information regarding Morgan Stanley’s role with respect to a Retirement Account, please visit www.morganstanley.com/disclosures/dol. Tax laws are complex and subject to change. Morgan Stanley does not provide tax or legal advice. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a Retirement Account, and (b) regarding any potential tax, ERISA and related consequences of any investments or other transactions made with respect to a Retirement Account.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving estate planning and other legal matters. 

This material may provide the addresses of, or contain hyperlinks to, websites. Morgan Stanley is not implying an affiliation, sponsorship, endorsement with/of the third party or that any monitoring is being done by Morgan Stanley of any information contained within the websites. Except to the extent to which the material refers to website material of Morgan Stanley Wealth Management, the firm has not reviewed the linked site. Equally, except to the extent to which the material refers to website material of Morgan Stanley Wealth Management, the firm takes no responsibility for, and makes no representations or warranties whatsoever as to, the data and information contained therein. Such address or hyperlink (including addresses or hyperlinks to website material of Morgan Stanley Wealth Management) is provided solely for your convenience and information and the content of the linked site does not in any way form part of this document. Accessing such website or following such link through the material or the website of the firm shall be at your own risk and we shall have no liability arising out of, or in connection with, any such referenced website. Morgan Stanley Wealth Management is a business of Morgan Stanley Smith Barney LLC. CRC 6483296 3/24

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I had the pleasure of watching New York attorney James A. Sherer’s engaging podcast about AI on the LearnFormula platform, a provider of CLE courses. As a partner in the New York office of BakerHostetler, Sherer co-leads the Emerging Technology Team for the Digital Assets and Data Management Group and addresses clients’ questions about AI.

During our interview, he took me on a tour of AI — a look under the hood — and what it can do.

I also discussed practical applications with Palo Alto, Calif.-based attorney Pablo Arredondo, vice president, co-counsel at Thomson Reuters and co-founder of Casetext, which has a commanding 34% market share of AI research tools for lawyers.

It is a fascinating time to be a lawyer 

“The power of AI is simply amazing,” Sherer says enthusiastically. “It can manage enormous amounts of data and, in effect, has read every book in the law library. It can also become a litigation coach — as if you are talking with an associate who has perfect recall for all of the documents in a case. 

“During a deposition, you can ask it to suggest questions that you might not have thought of — but which seem logical based on the data you have provided. Applied to a lease or a contract, it functions as a spelling and grammar check and will reduce the potential for malpractice — minimizing the chance of something important being overlooked, telling the lawyer, ‘Your contract reminds me of XYZ. Have you considered that?’”

AI can make a lawyer far more efficient

Lawsuits often create massive amounts of paperwork and exhibits to review. These can create David-and-Goliath situations where one side — in response to a discovery request — delivers hundreds of thousands of documents. 

“If one side does not have the time or personnel to go through everything,” Sherer notes, “they could miss something critical to their case. But AI reviews it all and might uncover highly valuable facts to support a position of which the attorneys were unaware before.”

He cautions, though, “While it is an amazing technology, we must maintain vigilance and need to develop systems that are self-correcting, as we have the duty to be sure AI acts in a legal and fair manner.” 

Justice delivered faster and less expensively

To learn more of how AI is being used today by lawyers and its practical benefits for clients, I also spoke with Arredondo. I asked him, “As it is often described as a game changer, what is the economic benefit of AI to both lawyers and clients?” 

“This technology helps in obtaining justice faster and less expensively,” he replied, “without a drop in quality, making it especially valuable to people who might not be able to afford top-shelf lawyers, or who rely on legal clinics to find attorneys to help them. 

“Similar to a turbocharged engine, it greatly enhances speed and makes lawyers more efficient — able to do more at a reduced cost to the client. For example, the AI can help you with your research and send it over to the word processor to be more seamlessly folded into the brief that you draft with its help.”

Finding that needle in a haystack

Historically, document review could take weeks — or even months — depending on how many documents there were and the number of associates in a law firm who were poring over them — the expense could be substantial. Often, a lawyer has a hunch that a handful of relevant emails or other evidence exists in a data dump that could contain hundreds of thousands of emails or other documents, but it is like finding the proverbial needle in a haystack.

“In a matter of hours, AI proves its value by finding what the lawyers hoped would be there. So AI is not just helping attorneys reach the same level of quality faster, and more efficiently, it enables us do a better job and get to a better outcome and with a real savings to clients,” Arredondo underscores.

Is failure to use AI a basis for malpractice?

Arredondo is confident that AI will become something that clients expect their lawyers to use. “I envision a day when failure to use it will be malpractice, as it is catching things that humans miss. A lot of solo practitioners are getting it. So we were happy to see it being adopted, not just at the big firms but at small ones as well.”

Will AI have an impact on people wanting to enter the legal profession? I put that question to Nancy B. Rapoport, professor at William S. Boyd School of Law, University of Nevada, Las Vegas, and her writing collaborator, Joseph Tiano, founder and CEO of Legal Decoder, a legal data analytics company.

They believe AI will indeed reduce the number of people joining the legal profession, because fewer people will be needed at the lower, entry levels.

And that is something to think about when considering a career in law.

For another take on this issue, see my 2023 article Could ChatGPT and AI Change Delivery of Legal Services?

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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Beryl is exceptional in two ways.

First, Beryl is the earliest Category 5 hurricane observed in the Atlantic basin on record and only the second Category 5 hurricane to occur in July. On average, the first major hurricane (Category 3 strength or higher) does not form until September 1, meaning Beryl developed exceptionally early, according to the National Hurricane Center.

Second, Beryl has rapidly intensified. Starting as a weak tropical depression on June 28, 2024, Beryl became a destructive Category 4 hurricane within just 48 hours. And while rapid intensification is common for major hurricanes, the timing is not. "Beryl is the earliest storm to ever undergo that kind of rapid intensification," according to NPR. "Usually, rapidly intensifying major hurricanes don’t form until later in the summer and the early fall, when water temperatures in the tropical Atlantic peak and hurricane activity is at its highest."

Beryl's early development and rapid intensification are due to near-record warm ocean temperatures caused by human-caused climate change, the development of La Nina conditions in the Pacific, reduced Atlantic trade winds and less wind shear, according to NOAA. Earlier this year, NOAA predicted an above-normal Atlantic hurricane season, forecasting a range of 17 to 25 total storms, with 8 to 13 forecast to become hurricanes.

Do you have the right insurance?

As hurricane season continues, home insurance becomes increasingly important. As a first step, make sure you have adequate coverage before a storm hits. In addition to comparing different insurance providers and policies available, you may want to look into additional coverage options. 

For a good starting point, use our widget below — powered by Bankrate — to compare home insurance rates today.

For full coverage against hurricane damage, you’ll need a flood insurance policy. No, flooding is not covered by standard home insurance, although lenders may require it if your home is located in a high-risk area. According to Policy Genius, flood insurance has an average cost of about $888 per year, but how much you’ll pay will ultimately depend on location and whether you opt for federal or private coverage. 

Wind can also do a lot of damage to your home. And while wind and wind-driven rain are covered by a standard homeowners policy, many charge separate wind deductibles, which are based on a percentage of your coverage and not a fixed dollar amount. For example, if your home is insured for $500,000 with a 5% wind deductible, and you have $30,000 worth of roof and siding damage from high winds, you’ll be responsible for $25,000, with your insurance covering only $5,000. 

Your risk for flood and wind damage can be found by going to Realtor.com or Redfin. Type in your address, and on your property's summary page, scroll down to the "environmental risk" or "climate risk." You'll see an assessment of your home's flood, wind, fire and heat risk on a scale from one to ten, where ten is the highest risk. These assessments are based on data by First Street. 

Another thing to consider? Your Tree, Your Neighbor’s Property: Whose Insurance Pays?

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